Kanzhun Limited (NASDAQ:BZ) reported a strong second quarter, but its headline profit growth was driven largely by an investment gain rather than its online recruitment operations. Revenue increased 14.1% year over year to RMB2.40 billion, while GAAP income from operations rose 32.6% to RMB863.2 million. GAAP net income jumped 173.1% to RMB1.94 billion, compared with 9.4% growth in company-defined non-GAAP adjusted net income to RMB1.03 billion.
For Kanzhun Limited (NASDAQ:BZ), the gap emerged below the operating-income line. Net interest and investment income increased to RMB1.63 billion from RMB157.0 million a year earlier. That included RMB1.47 billion of investment income from fair-value changes in an investee that completed an initial public offering in January 2026.
The investment gain was not generated by the company’s recruitment platform and was excluded from adjusted net income. It also carried a RMB366.5 million tax effect. After that related tax, the gain was worth approximately RMB1.10 billion, explaining much of the difference between reported and recurring profit growth. The complete non-GAAP reconciliation also excludes share-based compensation.
Bull Case
Kanzhun Limited (NASDAQ:BZ) still produced meaningful growth before the investment gain. The company’s trailing-12-month paid enterprise customers increased 10.8% to 7.2 million, while average monthly active users rose 10.4% to 70.2 million. Revenue grew faster than either metric, suggesting that customer growth and monetization both contributed. However, revenue covers the second quarter, the customer figure covers the trailing 12 months, and MAU represents a quarterly average.
Kanzhun Limited (NASDAQ:BZ) also demonstrated operating leverage. Its GAAP operating margin was approximately 36.0%, compared with roughly 31.0% a year earlier. Company-defined non-GAAP adjusted income from operations increased 19.2% to RMB1.05 billion, and the adjusted operating margin expanded 1.9 percentage points to 43.8%.
The balance sheet adds flexibility. Kanzhun Limited (NASDAQ:BZ) ended June with RMB18.81 billion in cash, cash equivalents, short-term time deposits and short-term investments, excluding investments in equity securities. Management expects third-quarter revenue of RMB2.41 billion to RMB2.50 billion, representing growth of 11.4% to 15.6%.
Bear Case
The investment gain makes Kanzhun Limited (NASDAQ:BZ)’s 173.1% GAAP net-income growth a poor measure of underlying earnings momentum. Adjusted net income rose only 9.4%, trailing both revenue growth and the 19.2% increase in adjusted operating income. The larger income-tax burden contributed to that weaker conversion, with tax expense rising to RMB550.3 million from RMB97.1 million.
Cash flow also moved in the opposite direction from reported earnings. Kanzhun Limited (NASDAQ:BZ) generated RMB944.8 million in operating cash flow, down 10.2% from RMB1.05 billion. The decline reflected higher advertising and marketing spending, increased tax payments, and lower cash receipts from interest and investment income, partly offset by higher customer billings.
That distinction matters because the fair-value gain increased accounting earnings without producing comparable operating cash flow. Adjusted earnings provide a cleaner view of the core business this quarter, although they also exclude share-based compensation and should not be treated as identical to cash earnings.
Hedge Fund Sentiment
The filings available so far reflect positions held before BZ reported its recent results. Insider Monkey’s database showed 25 hedge funds holding BZ at the end of 2Q2026, down from 34 funds three months earlier.
Conclusion
Kanzhun Limited (NASDAQ:BZ) delivered a healthy operating quarter. User and customer growth remained above 10%, revenue increased 14.1%, and operating income grew substantially faster than sales.
For Kanzhun Limited (NASDAQ:BZ), however, the 173.1% GAAP profit increase materially overstates recurring earnings growth. The more relevant signals are the 19.2% increase in adjusted operating income, the 9.4% rise in adjusted net income, and the decline in operating cash flow. Kanzhun Limited (NASDAQ:BZ)’s core platform performed well, but the investment-driven profit surge should not be extrapolated into future quarters.
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Disclosure: None. This article is originally published at Insider Monkey.
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